In the current debate about UK austerity, what’s missing from the choice (not the fake choice between austerity and no austerity, but the hard choice between Social and Economic austerity) are two important other options (Productivity improvements and Philanthropy).

To elaborate, the current debate about austerity should be about the mix of four things:

(1) Social austerity – realisable tax rises for some or all current UK tax payers). Of course, history shows us that raising taxes encourages tax avoidance and discourages incentive to work harder.

(2) Economic austerity – alleviating current austerity through borrowing to burden future citizens with greater austerity.

(3) Productivity improvements – workers choosing (through a combination of after-hours study and after-hours volunteering?) to up-skill, to raise their productivity to ultimately alleviate austerity. When we change our expectations, build on small successes to boost our confidence and reframe current problems in a different way using personal flexibility, then there is every chance to better ourselves. If the future is about portfolio careers, and in the age of smart machines, ‘keeping our skin in the game’ through clever design, then up-skilling starts today. After all, process automation and machine learning won’t wait for us, but proceeds at its own pace. A final question about labour productivity at the national level. Which is better – fewer people employed but them generating higher average labour productivity (the French model, relative to the UK model) or, more people employed but with lower average labour productivity (the UK model, relative to the French model).

(4) Philanthropy – particularly high-net-worth individuals forming consortiums, to alleviate UK social deprivation through charitable foundation activity.

The best solution will probably come from a better combination of all four things.

One great opportunity with philanthropy is developing ‘hospital charities’ to build city hospitals that are entirely charity-funded and can take some ongoing pressure off the NHS, care homes and private hospitals. Such hospitals could offer a more selective range of treatments (target elective-surgeries with long waiting lists?), than the NHS.

Food for thought?

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